Megawatt and Energy Remain the Main Drivers of AI Data Center Deals

As concerns about the exploding artificial intelligence bubble spread, the M&A transaction landscape on Wall Street remains dynamic. Industry players—especially Bitcoin miners and AI infrastructure developers—continue to make aggressive bids for megawatt-capacity electricity, even into the end of 2025. According to Joe Nardini, head of investment banking at B. Riley Securities, operational realities on the ground show something contrasting with often fluctuating market sentiment: the need for quality power to support data center operations continues unabated.

" M&A activity still persists because people still need energy," Nardini revealed in an interview. The demand comes from various directions—Bitcoin miners seeking locations with competitive energy costs, large corporations developing cloud computing infrastructure, and AI startups requiring large-scale GPU capacity. This dynamic creates transaction momentum that remains sustainable amid the volatility of the tech market.

Continued High Megawatt Demand from Various Players

Data center capacity focused on GPUs attracts serious attention from quality tenants willing to pay premium rates. Nardini notes that power demand from Bitcoin miners is indeed large, but pressure is even stronger from the AI and high-performance computing (HPC) sectors. clients in data center and Bitcoin mining sectors report ongoing demand for facilities already equipped to support energy-intensive GPUs and AI infrastructure.

This phenomenon is reinforced by supply dynamics in the market. Some Bitcoin miners, after the Bitcoin halving that cut rewards in half, face significant margin pressures. Although Bitcoin prices hover near or above $100,000, many miners are shifting strategies: they are beginning to provide AI hardware and HPC services within their existing data centers. This transition helps drive up valuations of several Bitcoin mining companies in 2025, amid the rising AI hype in the market.

Megawatt Valuations: From Realistic Peaks to Lowest Values

The journey of M&A transactions in this sector reveals an interesting valuation pattern. In competitive situations with high-quality power and suitable locations, dollar per megawatt metrics—measuring the value of each megawatt of capacity—can reach very attractive figures. Nardini disclosed that one transaction involved valuations exceeding $400,000 per megawatt, with potential reaching $450,000 per megawatt depending on negotiations. He has even witnessed previous deals valued as high as $500,000 to $550,000 per megawatt.

However, not all capacities receive the same treatment. For problematic or less desirable locations, offers still exist but with significantly lower valuations. Buyers are still willing to offer $100,000 to $250,000 per megawatt for such assets, provided they discount for market quality or location factors.

Concrete evidence of this market freshness is seen in Hut 8, a Bitcoin mining company whose shares surged up to 20% in early December 2025 after signing a $7 billion long-term lease agreement with Fluidstack. The 15-year deal includes 245 megawatts of IT capacity at its River Bend campus—an amount that demonstrates the scale of investment in energy-intensive infrastructure today.

Market Participants: From Hyperscalers to Private Buyers

The dynamics of buyers and sellers in this transaction market are becoming increasingly diverse. On one side, buyers include hyperscalers (large tech companies operating cloud infrastructure), AI companies, and Bitcoin miners. On the other side, sellers are no longer limited to traditional crypto industry players—sectors of the conventional industry are also active participants.

Nardini has witnessed deal processes involving century-old industrial facilities, where stable power availability remains a key attraction despite a sluggish market. In another case, individual asset sellers attracted interest from about 25 potential buyers, including Bitcoin miners, hyperscalers, and AI companies—all seeking Non-Disclosure Agreements (NDAs). This competition reflects the scarcity of quality capacity in the market.

This dynamic opens unique strategic options for asset owners: sell to hyperscalers or large developers, or try to become their own developers. Nardini observes that old industrial companies with inactive or nearly inactive facilities are starting to consider selling to the AI, HPC, and Bitcoin ecosystems. One example is a private client transforming an old office block into modular capacity, “building 30 megawatt units at once,” and now seeking additional funding for expansion. Even in one negotiation, tenants are willing to pay rent upfront before completion—illustrating how valuable the desired capacity is today.

Outlook 2026: A Still Positive Environment for Risky Transactions

Entering 2026, Nardini maintains his optimism about market conditions, noting that fundamental conditions remain intact. If interest rates fall, he projects a “risk-on environment” that will be positive for transactions in this industry. While he admits he might be “slightly promoting his interests,” the operational realities he hears from executives continue to support his bullish view: tenants are present, prices remain strong, and if one customer does not take a location, “another buyer will.”

A simple but important warning from Nardini is: if developers cannot lease what they build, or do not get the rates they need, that’s when to worry. Currently, based on his intensive discussions, there are no signs of such danger.

The latest Bitcoin price reached $78.31K, providing context for miners’ margins remaining under pressure despite record volumes and valuations of digital assets. However, with demand for megawatts and data center capacity remaining strong, the basic business economics for infrastructure developers remain solid.

Nardini concludes with a clear assessment: “Demand for powered data center capacity and AI HPC continues unabated. Data center developers have demand from several credible tenants at attractive rates, so core business economics remain intact.” Buyers are still very eager for significant amounts of energy in megawatts, and sellers see good valuations for their assets. Nardini affirms this confidence: “AI trading is still alive through the end of December 2025—and indicators show that momentum continues.”